Coffee shops are a staple of modern-day society. Especially small business coffeehouses that offer a refreshing respite from passionless chains. From quick caffeine fixes to leisurely catch-ups with friends, locally-owned coffee shops offer a cozy and inviting atmosphere to a wide range of people. With the growing popularity of specialty coffee and artisanal roasts, it’s no surprise that more and more people are considering opening their own storefronts. However, before you dive headfirst into the world of entrepreneurship, there are several things you need to know. In this blog post, we will discuss five important factors to consider before opening a coffee shop. Whether you’re a seasoned entrepreneur or a coffee enthusiast looking to turn your passion into a business, here are 5 things you need to know to lay the foundation for a successful biz in the coffee industry. So grab a cup of joe and read on!

1. Develop a Business Plan

Before starting any business, it is important to clearly understand your goals, target market audience, competition, financial projections, and marketing strategy. Creating a business plan will help you organize your ideas and give you a roadmap.

• Profitability: Set goals around your projected revenue in your current market. The main goal is to increase future revenue to combat inflation, including managing expenses to improve your overall profit margins.
• Brand awareness and loyalty: Building a strong brand can help differentiate a shop from competitors. Set goals around increasing brand recognition and customer satisfaction. Develop a unique brand identity and logo to establish a loyal customer base. Utilize social media to capitalize on reviews (Hello, Google Reviews, and Yelp), and always provide Wifi. Additionally, reward programs go a long way in building loyalty! When shopping for a payment processor, ask what services they offer to facilitate the loyalty process.
• Employee satisfaction: Happy employees are likelier to provide great customer service and be productive. Set goals around creating a positive work environment, fostering communication, providing opportunities for growth, and ensuring fair compensation.

2. Choose Your Processor

Starting a coffee shop can be expensive. You must purchase equipment, lease a location, pay for licenses and permits, and secure a payment processor. Ensure you have the capital to cover all the initial expenses until the business becomes profitable, and choose a payment processor. Credit card processing fees are unavoidable, and owners can easily spend $2,400 a month in fees.

• Convenience: A good processor will provide a range of payment options, making it easy for customers to pay using their preferred method. For merchants, a great processor should offer programs to offset the costs of credit card fees, such as Dual Pricing.
• Cost-effectiveness: A good payment processor will provide affordable, transparent, easy-to-understand rates. This helps you to manage your costs and avoid unexpected charges. Always request a demo or statement analysis when searching or switching to a new processor.
• Integration: A good payment processor will integrate seamlessly with your other business tools and systems, like your accounting software and website, and offer a point-of-sale (POS) system. This makes it easier to manage your finances and customer transactions in one place.

Check out our blog post on Surcharge, Cash Discount, Dual Pricing Oh My! for the low-down on available programs.

3. Location, Location, Location

Choosing the right location is crucial for the success of a coffee shop. Look for a location that is easily accessible, with affordable rent, has a high level of foot traffic, and is in an area with a large population of your target customers.

• Competition: A good location should not have too much competition from other coffee shops or cafes. Too much competition in the area could negatively impact your business and revenue.
• Visibility: A good location should be easily visible and accessible to customers with good foot traffic. A location with good signage and visibility from the street or main road will make it easier for customers to find your coffee shop.

4. Licenses and Permits

Depending on your location, you may need to obtain various licenses and permits to open a coffee shop. These may include health permits, business licenses, and zoning permits. Make sure you have all the necessary paperwork in order before opening.

• Research the requirements: Every city or state has different regulations and requirements for coffee shops. Research the licenses and permits you need to obtain to operate legally, including a business license, food service permit, health permit, and zoning permit. If this seems too hairy, go on to the next bullet point.
• Seek professional help: Obtaining licenses and permits can be complex, and mistakes can be costly. Consider hiring a professional like a small business consultant to help you navigate the process. They can guide you through the application process, ensure you have all the necessary documentation, and help you comply with the regulations.

5. You are who You Hire

A coffee shop requires a team of baristas to operate. Hire staff that is skilled, reliable, and customer service-oriented. Your staff should understand your vision for the business and will commit to providing excellent customer service.

• Enthusiasm and experience: A great staff member will be passionate about coffee and customer service. During the interview process, look for candidates who demonstrate enthusiasm for the craft, customers, and relevant experience in the hospitality industry. Prioritize experience and skills. Side note: If you truly have an inexperienced candidate, but they have the drive and willingness to learn, these may also be worth considering!
• Consider personality and cultural fit: Personality and cultural fit are crucial when hiring for a coffee shop. Look for candidates who are friendly, outgoing, and have excellent communication skills. Consider the personality traits that align with your coffee shop’s culture and values. Pro-tip: Ask behavioral questions during the interview to assess how they handle customer service situations or handle stress.

The Wrap Up

The dream of being a small business owner can be daunting enough, let alone opening a coffee shop. Yet crafting a product set apart from the rest is immensely rewarding.

It requires careful planning, finding the right payment processor, attention to detail, location, and talent. By following these tips, you can increase your chances of success and create a coffeehouse that stands out from the competition. However, it’s a learning process!

At KokuaPay, we offer simplicity. Our user-friendly hardware is designed to plug and play and is completely customizable for coffee shops. Plug in your hardware, download the KokuaPOS app onto your tablet, and begin taking payments.

Got questions? We’ve got you. Get connected with a team member today.